Corporate Crime
By Aaron Larson
Law Offices of Aaron Larson
March, 2000
Contents
- What Is "White Collar Crime"?
- What Should Businesses Do To Prevent Or Respond To White Collar Crime?
- When Can A Business Be Charged With An Offense?
- How Can A Business Be "Punished" If It Is Convicted Of A Crime?
Notice: Please note that if you have been charged with a criminal offense, you will likely benefit from consulting a criminal defense lawyer. You may find this article on "Using a Federal Criminal Defense Lawyer" to be helpful.
What Is "White Collar Crime"?
"White Collar Crimes" are a category of criminal offenses that typically occur in businesses or corporations, such as "insider trading," "antitrust violations," "computer fraud," "securities fraud," and "money laundering." White collar crimes are non-violent in nature, and generally involve some form of fraud or dishonesty. These crimes are committed through apparently legitimate businesses. Sometimes the principals of the business are involved in the crime, while on other occasions the crime is committed by an individual or employee within a business, without the knowledge of anyone else.
What Should Businesses Do To Prevent Or Respond To White Collar Crime?
Businesses can impose safeguards, to check on the conduct of even trusted employees. They can audit banking activities to ensure that employees are not engaging in unauthorized transactions - even if the books balance, there may be hidden transactions that would reveal questionable activities by an employee. They can quickly respond to rumors or allegations of wrongdoing, by launching an internal investigation, and by making sure that records are preserved.
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A business that does not respond appropriately to criminal activity, or allegations of criminal activity, may appear to be involved in that activity. Particularly if your business is subject to state or federal regulation, it is important to have appropriate compliance, reporting and investigatory mechanisms, to handle any rumors or reports of illegalities by employees. If a business does not wish to be held responsible for illegal conduct, or wishes to diminish its responsibility, the best means of doing so is usually to cooperate with any investigation of the wrongful conduct.
When Can A Business Be Charged With An Offense?
The answer to this question varies, depending upon whether the business is being charged under civil laws or criminal laws. Any time a business appears to have engaged in activities prohibited by antitrust laws, or to have engaged in "racketeering conduct," having failed to keep required records, having failed to comply with laws requiring certain financial transactions to be reported to the government, or in a broad range of other illegal activities, it may face a civil suit for its offense.
However, there may also be circumstances where a business or corporation appears to be so heavily involved in criminal activity that a criminal charge is filed against the business itself. This usually happens when it appears that the managers and directors of the business were so involved in, or so indifferent to, the illegality that the entire business appears to have actively or tacitly condoned or committed the crimes.
The concept of "corporate criminality" grew considerably in the late 1980's, when deregulation left many businesses unchecked by the government, and many businesses took advantage of the lack of regulation or inspection by committing criminal acts -- such as having their employees work under exceptionally dangerous and illegal conditions, or by engaging in rampant fraud or money laundering activities. This area has cooled down somewhat, as the federal government has returned to enforcement of its regulations in the wake of serious crises, such as the "savings and loan" disaster.
How Can A Business Be "Punished" If It Is Convicted Of A Crime?
A business can typically be punished only in financial terms. However, it is possible to impose a "corporate death penalty" by imposing fines so large that the business is forced to shut down. It is also possible to impose a term of "probation," during which the business can be carefully monitored by the court
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